This module allows you to analyze existing cross correlation between Madrid Gnrl and Russia TR. You can compare the effects of market volatilities on Madrid Gnrl and Russia TR and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Madrid Gnrl with a short position of Russia TR. See also your portfolio center. Please also check ongoing floating volatility patterns of Madrid Gnrl and Russia TR.

Pair Volatility

Assuming 30 trading days horizon, Madrid Gnrl is expected to under-perform the Russia TR. But the index apears to be less risky and, when comparing its historical volatility, Madrid Gnrl is 1.57 times less risky than Russia TR. The index trades about -0.3 of its potential returns per unit of risk. The Russia TR is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 117,660 in Russia TR on January 23, 2018 and sell it today you would lose (257.00) from holding Russia TR or give up 0.22% of portfolio value over 30 days.

Correlation Coefficient

Pair Corralation between Madrid Gnrl and Russia TR

0.67

Parameters

Diversification

Poor diversification

Overlapping area represents the amount of risk that can be diversified away by holding Madrid Gnrl and Russia TR in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Russia TR and Madrid Gnrl is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Madrid Gnrl are associated (or correlated) with Russia TR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Russia TR has no effect on the direction of Madrid Gnrl i.e. Madrid Gnrl and Russia TR go up and down completely randomly.